Letter: Sales tax plan unfair to La. residents

When I reached retirement age in 1999, I had two basic criteria for the selection of my retirement location: warm climate and no state income tax for retirees.

Then I further refined my choice by looking at the quality of life offered by the different areas of the states that met these criteria. At that time, Louisiana was actively courting retirees to settle or relocate here with the promise that state and local governments understood their specific needs and valued their contributions to a more robust economy.

Ultimately, Southeast Louisiana proved to be the clear winner for my wife and me, and we decided to stay in Slidell rather than retire out of state. We have never had reason to regret our choice.

However, I have steadily lost purchasing power to inflation over the years, and I can ill-afford the additional loss that would result from a shift of state taxes from an income tax to a sales tax. I also view such a change as a violation of the trust I placed in the state of Louisiana when I chose to stay here many years ago rather than move to another state.

Additionally, this is essentially the movement of a tax burden from the wealthy and the working middle class to those who are already financially vulnerable, including retirees living in the state who have given much to Louisiana in their more productive years. The state Legislature should not support this tax shift. If it does, there should at least be an option at the retail level for people older than 65 to opt out of the tax.

State mottoes may be said to reflect the character and beliefs of the citizens of the state. Louisiana’s motto is “Union, Justice, and Confidence.” This regressive tax change is divisively unjust and destroys the confidence of our state’s retirees in their future economic security.

The state Legislature should not implement this misguided and high-risk tax change, which serves political ambition more than the needs of the citizens of the state of Louisiana.

H. Dean Barks

retired civilian employee of the Navy

Slidell

Comments

1) Comment by ScotB - 04/03/2013

We have a high drop out rate and high incidence of single moms. Both groups correlate with poverty due to poor choices. The real impoverishment here in Louisiana is due to declining moral values more than any other single factor. Of course, there are additional causes as well, but these two lead the way. Other poor choices that are leading causes of poverty here in Louisiana are criminal records and drug use. Changing tax policy won't stop people from dropping out of school, having children out of wedlock, choosing a life of crime, or using drugs.

2) Comment by Maelstrom - 04/03/2013

Am I the only one that deducts his state income tax from his federal taxes? Even in the highly unlikely event that the tax revenues would be the same going to a sales tax, would we be able to deduct those sales taxes from out federal taxes? If not, then switching to a sales tax would end up being a net overall (state plus feds) tax increase for all except the very rich.

3) Comment by SuzanneMS - 04/03/2013

DMJ, let's add median income. Louisiana ranks 42nd, hardly indicative of a thriving economy with high-quality jobs. And we are 6th in the nation for income inequality, meaning the rich are getting richer and the poor are getting poorer.

4) Comment by DMJ - 04/03/2013

And if Louisiana is doing so good...then why mess with success? Texas, the model state according to those who want to do away with income taxes, has a higher unemployment rate than Louisiana. Clearly, income taxes are but one factor and the abstract liberalness or conservativeness of a particular state is meaningless.

5) Comment by Attila - 04/03/2013

They are not MY statistics...they came from the Associated Press which got them from the IRS. EVERYBODY should pay something. Yes even the "poor vulnables". That is fair. I don't advocate that the low income/information voters be saddled with the same tax rates as me, BUT a minimal minimum would at least give them some skin in the game. jwfiero and MGBFU: You may not like it, but I get sick of hearing about the rich not paying their fair share. I am barely middle class and I pay MY fair share. When I was younger I worked a full and a part time job to make ends meet, and I PAID income tax. As far what the teenager's fair share should be lets just say it should be something however small....and I stand by my statement that when taxes increase on the producers, the takers should see a corresponding decrease in their benefits.

6) Comment by DMJ - 04/03/2013

Agagent, here's a list of state rankings by unemployment rate - http://www.bls.gov/web/laus/laumstrk.htm . As you can see, some red states are near the bottom and some blue states are at the top and vice versa. Some states doing well have income tax; some don't. And unemployment rate not the only indicator of how well things are going in a state. There's also education, health care, crime, income inequality, etc. How does Louisiana fare on those metrics?

7) Comment by agagent - 04/03/2013

Louisiana’s unemployment rate has dropped to 5.5%. States with no income taxes are prospering, as compared to states which are following the liberal playbook of more government spending and higher taxes. The poor do not have to remain in a permanent "living in poverty" status (and a voting block for liberals causes) if businesses are given the economic freedom to prosper and create good jobs for everyone.

8) Comment by bworley50 - 04/03/2013

Steadily losing purchasing power over the years due to inflation is not every one else's problem. It is your problem, mainly due to your inability to manage your retirement portfolio.

9) Comment by twinkie1cat - 04/03/2013

The plan is just another attack on the poor and middle class and a way to help the rich avoid paying their share. President Obama has raised the taxes on some of the very wealthy although he was forced to start it on a much higher level ($400,000) rather than the more reasonable $250,000 level. So the selfish Republicans are trying to protect the wealthy and large businesses by eliminating their income tax at a state level. Even homeless people pay sales tax. Welfare recipients pay it too. Meanwhile, the wealthy and some of the middle class can afford to do their major shopping in Mississippi, Texas, or Arkansas if their sales taxes are lower, thus damaging Louisiana's economy further than Jindal has already. He won't care. He is planning to move to Washington DC before long. How long do you think it will take if this passes for the Walmart in Natchez MS to enlarge their store? How about putting one right over the state line in Beaumont Texas with a nice "regional" mall next door. >>>>>>>Louisiana is just collateral damage on Jindal's march to Washington. Let's stop him now, instead, legislators!

10) Comment by prbeav - 04/03/2013

I guess there'd be busloads to surrounding states for routine high-priced, packable products. I've got to check into why my retirement income is taxed. I think it's because I contributed to my retirement fund and continue to try to preserve it.

11) Comment by phil - 04/03/2013

Eliminate the state income tax (in phases) but leave the sales and other taxes alone, and then cut out all of the waste and possible corruption in government. That might be a fair tax plan.

12) Comment by GardenVariety - 04/03/2013

Great letter, HD Barks!

13) Comment by SuzanneMS - 04/03/2013

I understand that, jwfiero; I'll soon be "one of you." But I will still oppose any attempt to replace income tax with sales tax, regardless of whether I am exempt or not. Not only have the sales tax projections never once been met, if the sales tax increases, the majority of people will simply spend less, because they will have less left to spend. Put it another way, they'll spend the same amount, but walk out of the store with less. If they don't go out of state or online, that is. How about we look at the percentage of total income that is paid in taxes -- any taxes? It is a lie to say that the poor pay "no taxes." They may not pay federal income tax; they may not pay state income tax; they certainly do pay sales taxes and excise taxes (if they buy gas). If they are working at all, they pay Social Security and Medicare taxes. How about we look at the percentage of disposable income that is spent on taxes? Those at the bottom pay a far greater percentage of their disposable income in taxes than those at the top, for the simple fact that they have almost no disposable income and so spend all of it.

14) Comment by DMJ - 04/03/2013

When considering Jindal's proposal, I think it'd be wise to stop thinking it will end up being "revenue neutral." It won't. That's the point. Jindal and Co. will act really surprised mid-fiscal year that sales tax projections were too high initially, then they'll further cut funding to education, health care and social services. THIS is the point. They're objective is to starve government while simultaneously shifting the cost of it to the Dean Barks of the state. Jindal doesn't even believe in Voodoo Economics. He's not trying to lower rates in order to facilitate economic development which would bring in MORE revenue. He's just trying to spend less. He believes in small government for the sake of small government. Of course, he's not honest about this because he doesn't have integrity and won't level with his constituents.

15) Comment by Mygulfbleedsforu - 04/03/2013

This is not my day to read comments, I guess. I'm so very, very tired of "poor, poor rich people" sentiments as well as "those greedy state employee takers who want more at the end of their careers than to be given back only the dollars they were require to pony up, sans ANY earnings, that the state has been holding onto for up to 29 years." Attila, OF COURSE the top 20% of payers pay the lion's share of the tax. That would be true if the tax were not progressive, but flat. THEY MAKE MORE MONEY. Take a family -- two parents, two young teenagers with summer babysitting jobs, two pets. Six family members. What do you want to bet the top 33% pays 99% of the household bills? THEY MAKE MORE MONEY. So what, Attila, is the teenagers' fair share according to your frequent rant?

16) Comment by jwfiero - 04/03/2013

Attila, your statistics are always there to confirm that the wealthiest pay a far bigger share of the taxes than any other group. However, that should come as no surprise. After all, the richest 10 percent of Americans control 75 percent of the wealth, leaving only 25 percent to the other 90 percent of Americans. I am sure many people who pay little or no taxes at all would be more than happy to do so if they had a bigger piece of the economic pie. SusanneMS, many of us now retired took jobs in Louisiana at pay rates that were low even by Southern standards. What was promising, though, and offset the poor pay rate, was the retirement system and perks contractually offered by Louisiana, which included no state income tax levied against state employee and teacher pensions. Increasing the sales tax and doing away with the state income tax will prove "revenue neutral" only for those now paying state income taxes; it will unfairly increase the tax obligation of those like the letter writer and yours truly, who paid state income taxes all the years before we retired.

17) Comment by Attila - 04/03/2013

Maybe it is about time that the "vulnerables" paid their FAIR SHARE. Advocate article today by the Associated Press, not exactly a bastion of conservatism, indicates that the bottom 20% pay a negative 2.7% average tax rate which translates to a negative .4 % share of the tax burden. These people actually get a "refund" of taxes that they do not pay. Compare that to top 20% who pay 27.2% and whose share of the federal tax burden is 71.8% or the top 1% who pay an average tax rate of 35.5% with a 30.2% share of the federal tax burden. My taxes are going up....are the benefits to the "vulnereables" going down? Fat chance. The local, state, and federal retirees are mobilizing against Lil Booby's sales tax boondoggle. Without their support it is DOA.

18) Comment by SuzanneMS - 04/03/2013

I was with you until you asked for a special exemption for yourself on the basis of age. You're fine with the tax burden being shifted to the most vulnerable, as long as you're not one of them? And if the retired are exempted, that means that the sales taxes would have to be raised that much more on the rest of us to account for it.